Why we're a nation of homebodies

Most Australians think of themselves as highly mobile.  We're a nation of immigrants, after all.  The phrases ''sea change'' and ''tree change'' are commonplace.  But the data suggests otherwise.  Compared to the rest of the world, we don't like to budge.

An immigration department analysis in the 1990s found that the median distance Australians moved was just 16 kilometres over an entire decade.  So when Julia Gillard doubled the places in her Job Seeker Relocation Assistance Package, it was actually quite a big deal.

A 2010 election promise, the program gives unemployed workers grants of up to $9000 to travel to find work.  It has been expanded to help rebuild Queensland.  But the package has an importance that extends beyond welfare, or the Queensland floods.  It's a recognition that Australian job seekers aren't very mobile.

Perhaps fair enough:  Australians like their home towns.  As Dr Johnson put it, people ''have a strong attachment to the habitations to which they have been accustomed''.

Yet compare us to the United States.  Migrating within the country is a big part of America's employment culture.  Americans are twice as likely to move interstate as Australians.  We all know of New York as a city of migrants, but those migrants are as likely to be from within the US as beyond.

The World Bank has demonstrated a clear empirical relationship between high levels of population mobility within a country and that country's economic growth.  In the US, those who travel to find work earn, on average, around 10 per cent more than those who do not.  And, unsurprisingly, internal migrants are substantially more likely to be employed.

No surprise then that internal migration is an even bigger deal in the developing world.  Right now, China is in the middle of the Spring Festival, an annual event where around 130 million Chinese travel back to their home towns to celebrate Lunar New Year.  In 40 days during January and February, there are more than 2 billion journeys taken by migrant workers, reflecting the enormous shift of Chinese labour from the country to the city.

The boom in the Chinese economy is just as much to do with this migration as it is with the slow introduction of liberalised trade.  If the 20th-century United States had one of the great mass internal migrations, as the World Bank argues, then the migrations within 21st-century China will be tenfold more spectacular and a hundredfold more significant.

So why are Australians so stagnant?  It's not just a cultural thing.

A big cause of American internal mobility is tertiary education.  American students typically travel across the country for the university that's best for them.  Then, when those students look for work, they cast a wide net with an open mind.

But in Australia, our government's higher education policies encourage uniformity, not diversity.  All our top universities offer pretty much the same courses, taught in pretty much the same way, and confer pretty much the same quality of degree.  Students can't justify moving to attend a university offering the same service as a university in their home town.  Then, when graduates look for jobs, they only look for jobs near home.

America's more flexible labour market makes for more entrepreneurial and assertive employees.  Just like international immigration, there are few more entrepreneurial activities than leaving home to find a better life.

The Howard government had a similar relocation program to that being introduced by Labor.

Like the Howard-era policy, Gillard's relocation isn't just a free ride to Queensland.  The package contains penalties.  Workers who take the money but ditch their new job within six months are ineligible for unemployment benefits for 12 weeks, if they don't have a reasonable excuse.

Welfare lobbies and the Greens have embraced the idea of more social assistance, but they bristle at the penalties.  We're used to that:  these groups are always happy introducing more cash incentives to get into work, but never happy with disincentives to fall out of it.  Mutual obligation has been a tried, tested, and largely bipartisan feature of Australia's welfare system.  Anyway, it's hard to imagine any better way to protect the scheme from manipulation.

What little debate has surrounded the relocation package has focused on this penalty.  But let's discuss what the package means:  why Australians are so reluctant to move for a better job, and the policies that have unintentionally made us that way.